Daycare contract including 2 weeks vacation: what to write and why

Last updated 2026-07-09

Is it legal to charge parents during your vacation weeks?

Yes, in every state. No federal law and no state licensing regulation forces a family childcare provider or a center director to refund tuition for planned closure weeks. Your contract is a private service agreement, and courts treat it like any other service contract. If the contract says tuition is due during two annual provider vacation weeks, that clause holds up as long as parents signed it before care began.

The confusion usually comes from the Child Care and Development Fund (CCDF) subsidy system. Under federal CCDF rules, states set their own payment policies, including how many "absent days" or "closure days" they will reimburse a provider for. The federal CCDF final rule (published in November 2016 and codified at 45 CFR Part 98) lets states decide their own closure-day reimbursement limits ^[1]. Some states pay for provider vacation days. Others do not. That is a subsidy accounting question. It has nothing to do with whether you can charge private-pay families.

Write the vacation clause clearly, get a signature, and you are on solid legal ground.

What exactly should a vacation clause say?

A vacation clause needs five things: the number of weeks, the notice you give, the tuition owed, the enrollment hold, and whether you help with backup care. Vague language causes every problem. "Provider may take vacation" is not a contract clause. Here is what to spell out.

Number of weeks. State the exact number, usually two, and whether those are calendar weeks (Monday through Friday) or just the days the program is normally open.

Scheduling and notice. Specify when you will notify families. Thirty days is the professional minimum. Many providers announce dates in January for the entire year.

Tuition obligation. Say explicitly whether full tuition is due, a reduced hold fee is due, or nothing is due. Most experienced providers charge full tuition for at least one of the two weeks and a 50 percent hold fee for the second, though some charge full tuition for both. Whatever you choose, write the dollar figure or percentage.

Enrollment hold. State that the family's spot is held during your vacation. Without this, a parent could argue they owe nothing because no service is being rendered, and then try to reclaim their slot after the closure.

Makeup care. Address whether you will help families find backup care. You are not legally required to. Saying so in writing (yes or no) prevents the misunderstanding.

A sample clause might read: "Provider will close for two weeks each calendar year for vacation. Provider will give at least 30 days written notice of closure dates. Full weekly tuition remains due for the first closure week. A hold fee equal to 50 percent of weekly tuition is due for the second closure week. The enrolled child's spot is reserved throughout both weeks."

That is 60 words. It answers every question a parent can reasonably ask.

How much notice do providers typically give before vacation?

Thirty days is the working standard for private-pay families. There is no universal legal minimum, because state licensing rules almost never touch provider vacation scheduling. Thirty days is long enough for most working parents to line up backup care and short enough to be realistic when you are planning a year out.

Many providers go further and publish a full-year calendar in January that lists holiday closures, planned vacation weeks, and professional development days all at once. That approach ends the ongoing negotiation and gives families the full picture when they decide whether to enroll. Child Care Aware of America, which tracks childcare policy and practice nationally, reports that predictable scheduling and written policies rank among the top factors parents cite when they judge whether a provider is reliable ^[2].

For CCDF subsidy families, check your state subsidy agency's provider agreement. Some states require written notice (often 30 days) before closures that run past a set number of days if you want reimbursement for those days. Miss that notice window and you can lose the subsidy payment even when parents still owe you private tuition.

Should the vacation weeks be pre-scheduled or left flexible?

Pre-schedule them. The providers I have watched run into trouble almost always used flexible language like "two weeks at a time of provider's choosing," and then had parents refuse to pay because they said they never knew the specific weeks when they signed.

Pre-scheduled weeks, announced in January, kill that objection. Parents knew in February that you were closing the week of July 4 and the week after Thanksgiving. If they enrolled anyway, the argument is over before it starts.

Life happens, though. Build one sentence into the clause that lets you move a scheduled week with 30 days' notice. Without it, an illness or a family emergency puts you in the strange position of breaching your own contract just to take unplanned time off.

Run a center instead of a home program and the logic is identical, but the stakes climb. You have staff schedules, union agreements (in some states), and possibly subsidy contracts with your county that all have to line up with your closure calendar.

What tuition structure makes sense: full pay, hold fee, or nothing?

Charge full tuition for at least one week and a hold fee for the second. That is my honest read, and it is the structure most providers land on once they have thought it through. Here is the case for each option.

Full tuition for both weeks. Defensible and common among home providers with waiting lists. Parents pay for the slot, not by the hour. The analogy is a gym membership: you pay in February even if you never walk in. This works when your area has few licensed spots to go around.

Full tuition for week one, 50 percent for week two. A middle ground that acknowledges parents face real backup care costs during a closure. This is probably the most common structure among providers who take their business seriously.

No charge for vacation weeks. Rare among experienced providers, and it makes your business model fragile. Your fixed costs (rent or mortgage, insurance, licensing fees) do not pause when you close. Daycare liability insurance alone runs $300 to $1,500 per year for home providers, and that bill keeps arriving on your vacation ^[3]. Give two weeks away free and you are working 50 weeks to cover 52 weeks of rent.

One data point worth holding onto: Child Care Aware of America's annual Price of Child Care report put the average weekly cost of center-based infant care in 2023 at $321 nationally, and home-based care at $215 per week ^[2]. Two weeks at those rates is $430 to $642 in revenue. On a home provider's margins, that is not pocket change.

Put your choice in the contract before enrollment, hold the line, and you attract families who treat childcare as a business rather than a favor.

How do vacation clauses interact with CCDF subsidy payments?

It depends on your state, and this is where it gets genuinely messy. The federal CCDF program funds childcare subsidies for low-income working families. States administer it and set their own payment policies within federal guidelines ^[1]. The 2016 CCDF final rule, codified at 45 CFR Part 98, lets states pay providers for "absent days" including provider closure days, up to a state-defined limit. As the Administration for Children and Families puts it in its CCDF policy guidance, lead agencies "may pay for absences, including holidays, in order to support the fixed costs of providing care and to reflect generally-accepted child care practice" ^[4].

In practice, states vary enormously. Some pay for up to 10 provider closure days per year. Some pay for zero. Some pay only when the closure lands on a federally recognized holiday. Read your specific state subsidy provider agreement, not the federal rule, to know what you actually collect.

If your state reimburses no vacation closure days, you hit a gap. The subsidy family's co-pay may still be contractually owed to you (check your state's rules on that too), but the subsidy agency pays nothing on its share. Some providers waive the subsidy family's share during vacation weeks as a goodwill move. Others charge the full co-pay and eat the subsidy loss. Both are legal. Put your policy in writing either way.

For a wider look at how subsidy rules shape your overall daycare cost structure, the CCDF state plans published by the Office of Child Care are the primary source ^[9].

What other closures should the contract cover alongside vacation?

Write one closure section that covers everything: vacation, holidays, professional development days, weather, and illness. If you have a vacation clause, you are most of the way there already. Finish the job so parents never have to guess which closures cost them and which do not. The categories to nail down:

Federal and state holidays. List them. If you close for Columbus Day but stay open on Veterans Day, say so. Ambiguity about which holidays you observe is a top source of parent-provider fights.

Professional development days. Most state licensing rules require a set number of annual training hours for licensed providers, typically 12 to 24 hours per year depending on the state ^[5]. Take one PD day per quarter to hit that requirement, and your contract should say so.

Weather and emergency closures. Decide up front whether you refund or credit for days you close because of extreme weather, power outages, or public health orders. COVID-19 taught everyone that an unaddressed emergency closure policy turns into a nightmare. Most providers do not refund emergency closures below a stated maximum.

Illness closures. If you or a key staff member gets sick and you close for a day or two, is tuition still due? Most contracts say yes for short closures (one to two days) and offer a credit for longer stretches.

Package all of it into one "Closures and Tuition Policy" section. Easier to read, harder to argue with.

What happens if a parent gives notice during your vacation weeks?

Your contract should say the vacation weeks count against the notice period. This scenario happens more than you would expect: a family decides to leave, notices you are closing for two weeks, and times their notice so it lands during your vacation in hopes of owing nothing.

Spell it out. If you require two weeks' written notice to terminate enrollment (standard language), those two weeks run from the date of the written notice no matter whether the program is open. A parent who gives notice on the Monday of your vacation week still owes two weeks of tuition from that date.

Address the re-enrollment angle too. A family that withdraws and then wants back in after your vacation is a new enrollment, not a continuation. A new enrollment fee and the waitlist process should apply.

If you want an easy way to keep all of these terms straight and make sure your enrollment documents track your state's licensing requirements, ChildCareComp's compliance toolkit has contract templates organized by state closure policies.

How should the contract handle deposit and enrollment fees?

The vacation clause sits inside a broader payment policy, and your deposit and enrollment fees are part of that same picture. Get them all in one place.

Most providers collect a deposit equal to one or two weeks of tuition at enrollment. That deposit usually covers the last week (or two) of care, so a family who gives proper notice owes nothing at the end beyond any outstanding balance. Say in the contract that the deposit is non-refundable if the family withdraws without the required notice, or forfeited if they enroll and never show.

The enrollment or registration fee, usually $25 to $150 at home programs and $50 to $300 at centers ^[6], covers your administrative work and is almost always non-refundable. State that plainly. Some providers charge a re-registration fee each year, which is fine as long as the contract says when it is due.

None of these fee policies are regulated by your state licensing agency. Licensing agencies regulate safety, ratios, and physical environment, not your fee structure. Fees are purely contractual. See the ChildCareComp overview on home daycare insurance for how your financial policies connect to your business liability coverage.

What are the most common vacation clause mistakes providers make?

The mistakes that cause real problems are almost always small: no signature, vague dates, and language that contradicts itself. Here they are in rough order of how often they blow up.

No signature. A policy you hand out but never get signed is not a contract. Get a wet or electronic signature before the child's first day. Period.

Vague dates. "Summer" is not a date. "The week of July 7, 2025" is a date.

Conflicting language. The vacation clause says full tuition is due, but paragraph one of the contract says "tuition is for days of care provided." A judge resolves that conflict against you in small claims court.

No update process. Review contracts every year. Add a third closure week or change your hold fee, and parents need to sign an updated contract or an amendment. A verbal agreement to change terms is worth nothing.

Forgetting subsidy families. Your private-pay contract and your subsidy provider agreement are different documents with different rules. Keep them aligned.

Burying the clause. If the vacation clause hides on page 4, paragraph 12, in the same font as everything else, a parent argues they never saw it. Give it a bold, clearly labeled section. Some providers add a separate initialed acknowledgment page just for the closure and tuition policy.

The part time daycare angle adds one more wrinkle: if you have families on non-standard schedules, say whether the closure affects all enrolled families equally or only those scheduled for the closed days.

Does state licensing affect what your daycare contract must include?

In most states, no. Licensing rules tell you what your physical space, staff ratios, and health and safety practices have to look like. They rarely dictate the content of your enrollment contract beyond a few basics.

A handful of states go further. California, through its Community Care Licensing Division, requires licensed family childcare homes to give families a written policy statement covering fees, hours, and closure days ^[7]. That is not the same as regulating your vacation clause word for word, but it does mean your vacation policy has to live in a disclosed written document.

Check your state's licensing regulations for any required disclosures in parent agreements. The most reliable place to look is your state's childcare licensing agency website, usually under the family childcare home or child care center rules. The National Database of Child Care Licensing Regulations, maintained by Child Trends, is a good starting point for finding your state's rules ^[8].

Ratios, group sizes, and background checks have nothing to do with your vacation clause. They are also the things that get your license revoked if you ignore them. Keep licensing compliance and contract disputes in separate mental boxes.

A sample daycare contract vacation clause, ready to adapt

Here is a clause you can adapt. It is not legal advice, and you should have a local attorney review your full contract before you use it.

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Section 7: Provider Vacation and Planned Closures

Provider will close the program for up to two (2) weeks per calendar year for provider vacation. Closure dates will be announced in writing by January 31 of each year. Provider may change announced dates with at least thirty (30) days' written notice to enrolled families.

Tuition obligation during closure weeks:

• Week 1: Full weekly tuition is due.
• Week 2: A hold fee equal to 50 percent of weekly tuition is due.

The enrolled child's spot is held throughout both closure weeks. No new enrollment fee is required upon return from closure.

If a family provides written notice of withdrawal during a closure week, the notice period begins on the date of written notice and runs for the full notice period stated in Section 10 of this Agreement, regardless of whether the program is open during that period.

Provider is not responsible for arranging backup care during planned closures.

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That runs about 170 words and covers every scenario likely to come up.

For context on how your operating costs and contract structure fit a sustainable business model, the Child Care Aware of America annual Price of Child Care report is the best public benchmark out there ^[2].

Frequently asked questions

Can a daycare legally charge full tuition while closed for vacation?

Yes. No federal law and no state licensing regulation prohibits it. Your enrollment contract is a private service agreement. As long as parents signed a contract stating that full tuition is due during planned closure weeks before care began, that clause is enforceable. The payment holds the child's enrollment slot; it is not payment for hours of care delivered on specific days.

How much notice should a daycare give before taking vacation?

Thirty days is the professional standard for private-pay families. Many providers publish all closure dates for the whole year in January, which ends ongoing disputes. If you accept CCDF subsidy payments, check your state's provider agreement, because some states require a specific notice window (often 30 days) to qualify for reimbursement during closure days.

Will the CCDF subsidy still pay during my vacation closure?

It depends on your state. Federal CCDF rules let states pay providers for closure days as long as the child's slot is held, but states set their own limits, often 5 to 10 provider closure days per year. Some states pay nothing for provider vacation days. Read your specific state subsidy provider agreement, more than the federal rule, to know what applies to you.

What is a reasonable hold fee to charge during a provider's second vacation week?

Most providers who use a tiered structure charge 50 percent of regular weekly tuition as a hold fee for the second vacation week. That number is not regulated; it is a business decision. The logic: parents face real backup care costs during the second week, so a reduced fee acknowledges that while still covering your fixed costs like insurance and rent.

Do parents have to pay if they find backup care during my vacation?

Yes, if your contract says so. Whether a family arranges their own backup care has no bearing on their tuition obligation under a signed contract. Make the language clear: tuition is due regardless of whether the family uses an alternative provider during your closure. If your contract only says tuition is for care provided, you may have a problem, so review that wording.

How do I handle vacation weeks in my contract for part-time families?

Specify whether your vacation policy applies equally to all enrolled families or only to those scheduled on the closure days. Most providers apply it equally and charge every enrolled family a hold fee, because the slot is held for everyone regardless of schedule. State this explicitly; part-time families sometimes argue their obligation should be proportional to their scheduled days.

Can a parent give notice during my vacation weeks to avoid paying?

They can give notice, but your contract should say the notice period runs from the date of written notice regardless of whether the program is open. A parent who gives notice on the first day of your vacation week still owes the full notice period of tuition from that date. Without that clause, some families will time their exit to land during your closure.

Should I list specific vacation dates in the contract or just reserve the right to take two weeks?

List specific dates or commit to announcing them by a fixed date each year (January 31 is common). Vague language like 'two weeks at a time of provider's choosing' gives parents grounds to claim they lacked adequate notice. Pre-announced dates, signed in the contract or acknowledged in writing, remove that objection and make your closure policy legally cleaner.

What should I do if a parent refuses to pay during my vacation closure?

First, confirm your contract clearly states tuition is due during closures and that they signed it. If it does, send a written reminder citing the specific contract section. If they still refuse, small claims court handles contract disputes this size in most states without an attorney. Document everything: the signed contract, your notice of closure dates, and every payment communication.

Do I need to update my contract every year to reflect new vacation dates?

Not if your contract says you will announce dates annually in writing by a specific date. That clause handles it. What does require a new signature or signed amendment is any change to the tuition amount, hold fee percentage, notice requirements, or other material terms. Announce dates annually in writing; change material terms with a signed amendment.

Does my state require me to put vacation policy in a written parent agreement?

Some states do. California, for example, requires licensed family childcare homes to give families a written policy statement covering fees and closures. Most other states do not mandate specific contract content beyond basic disclosures. Check your state's childcare licensing agency website for required parent agreement language. Even where it is not required, a written signed policy protects you far better than a verbal one.

Is there a difference between a vacation closure and an emergency closure in the contract?

Yes, and you should treat them differently. Vacation closures are planned, announced in advance, and tuition is typically due in full or at a hold rate. Emergency closures (weather, illness, power outage) are unplanned. Most providers do not refund short emergency closures but offer credits for extended ones, often defined as more than two consecutive unplanned days. State both policies clearly.

Can I take more than two weeks of vacation as a daycare provider?

There is no licensing rule capping how many vacation weeks you take. It is a business decision. Most providers stick to two weeks because more strains family relationships and, if you accept CCDF subsidies, may exceed your state's reimbursable closure day limit. Want three or four weeks? Write it into your contract, but expect some enrollment pushback in competitive markets.

How does the vacation clause interact with my termination policy?

They have to stay consistent. If your termination policy requires two weeks written notice with tuition due during the notice period, and your vacation clause says tuition is due during closures, then tuition is due during vacation weeks even while a family serves notice. Make the language in both sections say the same thing so you do not create a contradiction a parent can exploit.

Sources

1. Administration for Children and Families, Child Care and Development Fund Final Rule (45 CFR Part 98): Federal CCDF rules allow states to pay providers for closure days, including vacation, as long as the child's slot is held, up to state-defined limits.
2. Child Care Aware of America, Price of Child Care annual report: Average weekly cost of center-based infant care was $321 nationally and home-based care averaged $215 per week in 2023; predictable scheduling is among top factors parents cite in evaluating providers.
3. National Association for Family Child Care, business resources on provider insurance costs: Daycare liability and business insurance for home providers averages $300 to $1,500 per year depending on coverage level and state.
4. Office of Child Care, ACF, CCDF Policy Guidance on Absent Days and Provider Closures: Lead agencies may pay for absences, including holidays, to support the fixed costs of providing care as long as the provider continues to hold the child's slot.
5. Office of Child Care, ACF, CCDF State Plans and Training Requirements Overview: Most state licensing regulations require 12 to 24 annual training hours for licensed childcare providers, contributing to planned professional development closure days.
6. Child Care Aware of America, Understanding the True Cost of Child Care for Infants and Toddlers: Enrollment and registration fees at home programs typically range from $25 to $150 and at centers from $50 to $300.
7. California Department of Social Services, Community Care Licensing Division, Family Child Care Home General Licensing Requirements: California requires licensed family childcare homes to provide families with a written policy statement covering fees, hours, and closure days.
8. Child Trends, National Database of Child Care Licensing Regulations: The National Database of Child Care Licensing Regulations compiles state-by-state licensing rules including any requirements for written parent agreements and disclosure policies.
9. U.S. Department of Health and Human Services, Office of Child Care, CCDF State Plan database: State CCDF plans detail each state's specific policies on provider closure day reimbursements and absent day limits for subsidy families.
10. National Association for Family Child Care, Quality Standards for NAFCC Accreditation (business and administrative practices): NAFCC accreditation standards recommend that family childcare providers maintain written enrollment contracts that include fee policies, closure schedules, and termination notice requirements.